On 4 September 2015, the Monetary Authority of Singapore (the “MAS”) and the Singapore Exchange (the “SGX”) jointly announced that the MAS and the SGX, together with the Securities Commission Malaysia (the “SC”) and the Securities and Exchange Commission Thailand (the “SEC”), have issued a handbook (the “Handbook”) to provide guidance on various administrative and procedural matters concerning the Streamlined Review Framework for the ASEAN Common Prospectus (the “Framework”), including the eligibility criteria for issuers, the listing admissions requirements and application procedures in each participating jurisdiction and the review timeline for the cross-border offering of equity and plain debt securities within ASEAN (“ASEAN securities”).
By way of background, on 3 March 2015, the MAS and SGX jointly signed a Memorandum of Understanding (the “MOU”) with the SC and the SEC to establish the Framework. The Framework, which is an initiative under the ASEAN Capital Market Forum (“ACMF”) Implementation Plan endorsed by the ASEAN Finance Ministers, will facilitate cross-border offerings of ASEAN securities and represents another step towards regional capital markets integration.
The Framework streamlines the review process for a prospectus (which must be prepared in accordance with the ASEAN Disclosure Standards) for a multi-jurisdiction offering of ASEAN securities, and requires both the home and host authorities to complete the review process at the same time, within three to four months from the date of submission. This will shorten the time taken for an issuer to obtain approval to offer its securities in multiple jurisdictions, thereby enhancing market efficiency and providing more certainty to the issuer in terms of the time-to-market. ASEAN issuers will find it easier to raise capital across ASEAN countries and more efficiently raise funds for their investment and expansion. At the same time, investors will have easier access to investment opportunities.
The home authority and host authority refer to the signatory(ies) of the MOU from the home jurisdiction and host jurisdiction of the issuer respectively.
As to how an issuer’s home jurisdiction is determined, the Handbook provides that where an issuer is or will be primary-listed in only one signatory jurisdiction (i.e. the jurisdiction of a signatory of the MOU), that signatory jurisdiction is the issuer’s home jurisdiction. Where an issuer is or will be primary-listed in more than one signatory jurisdiction, the home jurisdiction will be determined as follows: (a) if the issuer is incorporated in one of the signatory jurisdictions in which it is or will be primary-listed, the home jurisdiction will be the signatory jurisdiction in which it is incorporated; or (b) if the issuer is not incorporated in any of the signatory jurisdictions in which it is or will be primary-listed, the home jurisdiction will be the signatory jurisdiction chosen by the issuer to be its home jurisdiction for the purpose of the Framework.
Currently under the Handbook, signatory jurisdictions refer to Singapore, Malaysia or Thailand.
A host jurisdiction refers to a jurisdiction, other than an issuer’s home jurisdiction, in which the issuer seeks to list or make an offer of ASEAN securities and to seek approval, recognition or registration, as the case may be, of its prospectus to be issued in relation to such offer.
Set out below are some key points to note under the Handbook.
Criteria for issuers
In order to qualify to make applications under the Framework, the issuer must be incorporated in a signatory jurisdiction and must have sufficient connection with one or more signatory jurisdictions. This means that the majority of the issuer’s non-independent directors must be ordinarily resident in one or more signatory jurisdictions; and either (a) an individual or individuals who ultimately hold the majority of the voting rights of the issuer’s shares, must be ordinarily resident in one or more signatory jurisdictions; or (b) the issuer’s main operations must be located in one or more signatory jurisdictions. Further, in the case of an offer of equity securities, the issuer’s equity securities must be or will be primary-listed on the main board of at least one exchange situated in any signatory jurisdiction. In the case of an offer of plain debt securities, the issuer’s equity securities must already be primary-listed on the main board of at least one exchange situated in any signatory jurisdiction.
The issuer must submit its applications to the home and host authorities concurrently, or in the case of submission to the host authorities, within one business day of submission to the home authorities. There are also certain prescribed documents that the issuer must submit to each of the home and host authorities.
Translation of the prospectus
The prospectus for ASEAN securities submitted to the home and host authorities and made available to investors must be in English. A host authority may require the prospectus to be translated into the official language(s) of the host jurisdiction.
In conjunction with a cross-border offering under the Framework, an issuer may also apply for a listing of its ASEAN securities on an exchange in a host jurisdiction. An issuer whose equity securities are primary-listed on an exchange in a signatory jurisdiction must comply with the listing rules and continuing obligations imposed by that exchange and/or the relevant authority, as the case may be. The exchange on which the issuer’s equity securities are secondary-listed and the relevant authority may also impose additional regulatory requirements as necessary on the issuer. Listing rules will also apply to an issuer whose plain debt securities are listed on an exchange in a signatory jurisdiction.
Where a dual primary listing is sought, the issuer will have to consult the relevant home and host authorities in advance.
The following materials are available from the MAS website www.mas.gov.sg: